Posted
by
kdawson
on Monday January 19, 2009 @11:41PM
from the more-with-less dept.

An anonymous reader writes "According to the Santa Rosa Press Democrat, geeky tech publisher O'Reilly Media has slashed 14% of its workforce, or 31 people. Founder and tech pundit Tim O'Reilly comments on the layoffs by exhorting people to 'get more with less.' According to the article, 'Just this week... both tech giant Google and book retailer Barnes & Noble announced their first layoffs ever. Other publishing houses, including HarperCollins, Houghton Mifflin Harcourt, Random House, and Simon & Schuster have frozen salaries or cut jobs, or both.'"

The first time reading that I thought it said employees were being exhorted to "get more with ass." Which I thought was either brutally honest job advice or a complete change of direction in the business plan. Or perhaps some bizarre hybrid. PHP Booty Call.

"The Digital Media branch was restructured into one publishing division along with the companyâ(TM)s Missing Manual group, Oâ(TM)Reilly Technology Exchange and its Head First series, Winge said."

Without actually seeing the company's financials, this could well just be standard streamlining for better efficiency, perhaps a proactive move before they're seriously hit. The story noted that they've been through much worse before, after they had to seriously trim their 300+ employees after the dot com bust.

Know what would be *news*? A report that some company's leaders have decided to bite the bullet and weather the storm. Not, massive layoffs, declaring bankruptcy, or trying to pass the problems to the consumer. Let's hear about a company whose execs are man enough to at least *try* to ride out this slump.

I am already sick and tired of everybody using "the economy" as their excuse for everything. And I don't remember seeing an article about how O'Reilly for instance, tried things like cutting unnecessary

Actually layoffs are pretty much all that do make the news, regardless of what else is being tried first. What you see are "Company X lays of Y workers". You never see "Company X keeps Y workers a little longer than they otherwise might have", nor do you later see headlines like "1 worker gets a job elsewhere" repeated Y times.

KPMG is asking its workers to drop of hours (and pay to equivalent) of 4 day weeks or take a few months off at 30% pay to drop costs while demand is low, that was covered on the news. Story on BBC [bbc.co.uk]

If only the rest of the economy could adopt this change. Imagine a world of 3 day weekends EVERY WEEK! If this were a universal change made in America, I predict the 20% drop in salaries would be met by sharp 20% drops in the prices of things we need to buy. Meanwhile, I cannot imagine a corrorlary drop of 20% in productivity. Surely there will be less productivity, but industrial efficiencies developed in the last decade have enabled most businesses to empower their employees to create more products in

If they're managers of a publicly held concern, their first instinct is probably to do whatever supports shareholder investment. Because if they don't, the shareholders will put them out on the street.

If they manage a privately held firm, that doesn't mean there are no shareholders -- just that the owners have a bit more privacy and, sometimes, can afford to take the longer view.

In either scenario, the job of management is to run the company in such a way that it meets (or at least attempts to meet) t

I think I'm seeing flaws in the whole corporate model, not just its current effects.I'm am not convinced that corporations should enjoy the protections they do, if they don't "promote a social good" as a primary motivation. Probably just saying this makes me a Marxist or something. People aren't really given much option except to live inside of the system that is controlled by the profit-driven 'corporate' mentality, and it winds up having more influence than any system of government ever has.

People aren't really given much option except to live inside of the system that is controlled by the profit-driven 'corporate' mentality, and it winds up having more influence than any system of government ever has.

Find enough like minded individuals and start a Kibbutz. There's plenty of unused land in the US you could buy for cheap. It will be hard work, but the current easy life we have comes, to a large extent, because of corporations.

Do you have any idea how expensive it is to employ people? Obviously big companies have a lot more "extraneous" costs that can be cut, but many smaller and midsize companies don't run with a lot of fluff to begin with, and for many companies, employees are the single biggest expenditure.

I work in publishing, in a small company (~20 people)... we don't have elaborate travel costs, don't throw parties, or buy crazy advertising, the boss isn't some fatcat CEO, etc. Our biggest costs--printing books, shipping books, labor. Not a thing we can do about printing and shipping costs--they are out of our hands. Labor is about it. Apparently the employee insurance plan (which not everybody is on--some have their spouses, so maybe 10-15 people insured?) is running close to 100k a year. (that's one thing I would like Obama to fix!)

Should also add that we've had no "redundancies" and doesnt seem like we will (heh, that's what everybody says, right?)

We are a consulting, IT services and software development company. Not a big name, and we are very small. I'm the founder of the company. We have 30 something people. The economic problems affect us too. Projects in the pipeline dried up, as customers cancel or postpone indefinitely. Quite a bit of receivables suddenly become bad debts.

We could have slashed half of the workforce, but I'm putting in my life savings, and borrow money to pay for the monthly expenses and salary, trying to ride the storm. We don't even cut any benefits, we even gave everyone a small bonus at the end of year (yeah, in cash, not a Gphone like Google did), and also paid for the annual health checkup (as we have done every year), when every other company has cut all these.

Now, can I get the good publicity now? Can we be called a good corporate? Can we get more clients (eventually) because we are good to our employees? In fact, I'm not even sure that, once the economic slump is over, our employees would even be grateful and stay a bit longer with us.

When the economy is good, we see employees jump ship for a 100$ raise all the time, and being so cynical at the same time. During a bad economy, when a company is trying to be nice, no one notice. As a matter of fact, a lot of people called us stupid too, because employees are ungrateful by nature. Sometimes, I just think being nice does not pay. But I'm just trying to do what I think is the right thing, and hopefully, more people or more employees recognize that, and have the solidarity that would allow us to get past this time. But telling the truth, I don't have high expectation for this, as I think it would be same old, same old, as the last recesssion in the early decade. We did the same thing at that time too, but that didn't prevent employees to be so cynical. Go figure. Some day, I'll have to learn to be "evil" too.

If you want to combine business with philanthropy, you're welcome to do so. However, you shouldn't assume that is somehow the duty of business owners. The businesses exist to make a profit within the bounds of law. That is not evil, hearless or cynical. That's the way things are supposed to be.

Moral obligations apply to human beings, nonprofit organizations and the government. In fact, the only truly effective moral actor is the government. If the government (aka "we the people") decides that a corporate ow

We could have slashed half of the workforce, but I'm putting in my life savings, and borrow money to pay for the monthly expenses and salary, trying to ride the storm. We don't even cut any benefits, we even gave everyone a small bonus at the end of year (yeah, in cash, not a Gphone like Google did), and also paid for the annual health checkup (as we have done every year), when every other company has cut all these.

Now, can I get the good publicity now? Can we be called a good corporate? Can we get more clients (eventually) because we are good to our employees? In fact, I'm not even sure that, once the economic slump is over, our employees would even be grateful and stay a bit longer with us.

You have my sympathy and my respect. No good deed goes unpunished and I'm sure you will take some hits from this. However, I would like to optimistically think that the ones who jump ship are the mercenaries and the ones who remain will be all the more loyal for it. I know how hard it is to find good people and how wasteful it seems to cut them in the crisis of the moment because you could well be desperately needing them in six months.

I would be terribly frightened to own my own company in this environment

When the economy is good, we see employees jump ship for a 100$ raise all the time, and being so cynical at the same time. During a bad economy, when a company is trying to be nice, no one notice. As a matter of fact, a lot of people called us stupid too, because employees are ungrateful by nature.

I could make a little more money elsewhere, but you couldn't pry me loose from this job. My boss hands me general outlines of projects and then gives me full authority and responsibility to finish them on my own. I can work from home when our babysitter takes a few days off without having to ask permission first. I have my own office with lots of personal stuff in it. The only time he has something to say about hardware purchase requests is when I should have bought stuff earlier instead of trying to make do. My boss didn't buy my loyalty with a paycheck; it'd take a lot more money for me to gladly do weekend projects for a company I didn't like.

You sound like a good boss with your head in the right place. Yes, some employees will take advantage of this and then move on, but isn't that always true in life?

No doubt things are going to get worse, with loads more layoffs. As it is, companies have been quietly laying off. For example, verizon, comcast, and qwest have for months doing layoff. But the good news is that lots of new companies will come out of this just due to necessity. We will see lots of new innovations all over the world.

Why should they want to earn less money? It's their company and their money, and they can spend it on what they like. I'm sure whenever you own a company, you'll spend your life savings employing people you don't need, just out of the good of your heart.

Then they're doing something wrong, when they only pay the publisher about half the cover price, and are free to return any books that don't sell. Going from a 50% margin to a 2% margin is a sign of poor management, not any inherent difficulty in the industry.

Going from a 50% margin to a 2% margin is a sign of poor management...

50% is gross profit margin, while the 2% is net profit margin. To get from gross to net, you have to take into account rent, labor, taxes, depreciation, interest payments, insurance and lots of other expenses. Perhaps there is some poor management, but 2% net profit margin doesn't necessarily indicate this.

Tim says at TFA: "The layoffs, which were spread across the company, were part of an overall reorganization to create more focus on some new opportunities, as well as a response to today's very tough economic climate."

Cut the crap, Tim. Why can't CEO's just say it:

"We laid of 30 people to save money so we don't lose the whole company. Sales are down, profits are impacted. If we don't lay off, we will die."

Be real. It'd garner a lot more respect from the people you NEED supporting you.

Because these sorts of layoffs are cutting out dead wood, and the economy is a great excuse. The whole point is that CEOs have already learnt that being honest about why someone's being fired is a good way to have people hold an unnecessary grudge. Obviously, you can't say that, because it comes back to them and they get to find out that the company felt they were astonishingly mediocre.

So in one part of your sentence, you say they're cutting dead wood (something Tim never alludes to, nor do I in my alternative), and then you say the economy is a "great excuse", which is the whole point of both Tim's statement, and mine.

I tend to agree with you, up to a point some layoffs are weeding the garden, so to speak -- but there's also a LOT of really stupid stuff going on right now, in the name of "preserving capital" at companies.

I don't know, it seems he said roughly that. He wasn't as blunt as you, but that last half of the sentence ("a response to today's very tough economic climate") seems to roughly equate with your comment about sales and profits being down and needing to fire some people. As far as saying anything close to "we needed to avoid losing the whole company," people don't say that because it's simply irresponsible. It will create a panic whether there is any reason to panic or not and drop the share prices if it's a publicly-traded company, all for absolutely no benefit.

The first half of the sentence is no doubt an attempt to soften the blow of the latter, but it may (may, I have no idea) also be a glimpse into who was fired. When you're canning people for economic reasons, you can go about it in a lot of different ways. For example:

1. The newest hires; this probably saves the least money (per job), but shows some loyalty to older employees.
2. The oldest hires; this probably saves the most jobs because older employees tend to be paid more, but shows no loyalty and may throw out too much institutional knowledge.
3. Management. This is similar to #2, but may include some higher-priced newer hires. It also risks losing institutional knowledge, and is harder to project the real benefits from it because there likely will be some sort of reorganization costs involved when people are suddenly reporting to a new person and perhaps have new requirements or responsibilities.
4. The highest-paid people. This will be similar to a combination of 2 & 3.
5. Some specific sub-set of people, usually a specific team or division. As a really contrived example, this would be something like a car manufacturer firing the SUV team because they don't plan to make SUVs in the near future. (Yes yes -- they can probably do other things equally well, work with me!)
6. Probably others that aren't coming to mind right now.

If the first half of the statement has a deeper meaning, it sounds like he's saying they chose #5. They fired some people because they had to fire some people, yes, but the people they chose were presumably ones who fit into a business model they're moving away from going forward.

These people are, in part, professional wordsmiths. They may try to couch what they're saying in more comforting terms, for good reasons or bad, but there's always a value to seeing what specific words they chose.

Why "presume" all of this? This is my point. Yes, I was purposefully blunt to get some discussion going and a reaction... not a troll, just enough to get people to engage brains.

But here's the thing... if you're having to guess what and why they did it, then he really was mealy-mouthed. Why don't the shareholders demand truthfulness of the executives in words a high-schooler can understand?

The words they use when they're giving bad news sound like the types of statements that come out of academia, and th

Folks, dead-tree publishing is hardly the wave of the future. People don't even buy our reference works any longer, they just google. We can sell them more tutorial works, and we can make money from advertising coupled with online references only if ours are consistently better than everyone else's, because there is no shortage of online references for computer software and languages. Half of you do things we don't have much use for any longer. We've got to radically redirect

Sourcelabs tried it with swik.net, I think, but didn't make it. I was gone from there by then. Anyway, much of their content was scraped from elsewhere.

How are your books doing? I am pretty much out of that business for now. The Prentice Hall division I was with did professional reference. That is probably the niche that has suffered most, not from the economy but from online sources.

I don't know that I can give specific details, but at 10% of wholesale, I don't make enough money in royalties to work as a full-time author of technical books. I believe there's still a market for the printed word, but I have my doubts that a big publisher creates as much value as it captures, at least from the author's point of view.

Uh-huh. It is especially true for folks like me who really just stuck their name on the front of the book for series recognition and didn't do the work. Authors don't need that any longer, if they even did then.

Do you think you might try to do it on your own? Selling online, demand printing, etc? I'd do it that way today if I felt the need to write.

It's an interesting point Bruce. The Internet continues to be the big thing shaking up business, worldwide.

Leo Laporte's keynote at MacWorld was along a similar vein for broadcasters, just a short few days ago. Broadcasting will be similarly dead eventually. People want a customized continuous stream of only the information they want. They don't want "mass media" anymore.

I look at my little sister's generation -- she hardly ever watches "the news". She's still well informed about general news from the overwhelming flood of information about the same topics over and over spewing from the broadcasters -- it works it's way to her somehow, but she's better informed and dare I say, "more competitive than her older peers" on the topics that interest HER.

This is happening to books, broadcast, anything that can't change rapidly.

Sure, there are things that are good on paper -- things that don't change. Stuff like "How to learn to fly a plane", and "Physics 101".

But trying to put down anything on paper like software languages or computing techniques, is a short-lived proposition -- unless you're talking core technologies like IP basics (and not how to program the latest router du-jour to do what you want with IP), etc.

I think the point I'm getting to here in this rambling fashion (hey, I'm tired.. hah...), is that static information -- is good in print. Stuff that changes, even slowly, has to be priced higher in print than anyone's willing to pay... to make it worthwhile to publish it in the first place.

Broadcast companies on the other hand have a small leg up, if they morph and morph quickly... having a 50,000W AM station at 850 KHz shouldn't be about putting out AM modulation of voice and news anymore -- it's a wide-area low-speed data transmitter... that can then be sliced up into packets.

He who dies with the most erlangs wins! -- Is our local joke in our little techie group. (We're telco-heads, and telco gets it... everything's rapidly sliding over to VoIP, and the struggles against QoS and actual voice quality have already begun long ago.

Not only that, we're just going straight to video and so-called "HD" video, and that 1960's world's fair dream of the videophone is here... easy to do on any laptop... *With enough bandwidth* to the laptop.

And print "media" like newspapers? The businesspeople already KNOW that model is dead. It's just being propped up. (I will miss my daily paper copy of the Wall Street Journal someday, but I can print it if I want to waste the toner... eventually.)

It's interesting times, but the Internet and packet-switched networks are still shaking things up... it's not done yet.

The movement to these new things is why I'm still upbeat about this so-called "bad" economy. There are still jobs (perhaps boring ones, but IT was always the "plumbing" of the business anyway -- the booming 90's just made us all feel more important than we are -- we're overhead, unless we make or save the company real MONEY), converting these old technologies to new ones.

The business world isn't dead... it's just leaning back on its heels and thinking. The first companies to lean forward and grab on to the fast-moving rope of time, and maybe getting some burns in the process, are going to do just fine.

I think plenty of people "get" the new economy, and the impact of the internet on media. The problem (for publishers and content producers, anyway) is that no one has quite figured out how to make a buck from a culture that has become accustomed to getting their news and entertainment for free. Advertising isn't working, because people have a choice now, and advertisers finally have the ability to quantify just how ignored their ads really are. Subscriptions aren't working, because there are a million monke

I look at my little sister's generation -- she hardly ever watches "the news". She's still well informed about general news from the overwhelming flood of information about the same topics over and over spewing from the broadcasters -- it works it's way to her somehow, but she's better informed and dare I say, "more competitive than her older peers" on the topics that interest HER.

I heard an interesting description of this phenomenon the other day. In the past, news was something you had to go find; you'd s

I use my books quite a lot, while wikipedia, google etc. has lots of nice information they seldom have the in-depth knowledge I need for my field of work.

Also printed books doesn't change - when I read something I know it is in the book, I can mark it and easily find it again - if it was a web page it would be subject to alterations at the authors will.

"The federal government is about to near double the deficit in a single day, we're not one of the companies that won that lottery, and we have no idea what will happen to the economy (or our tax rate) as a result. Heading for the bunkers and seeing how long we can hold out".

Remember that actual spending and wages are not down that much yet - companies are cutting back big time in anticipation of something much worse ahead. Though your end motive is right, they are just trying to do what they can to keep t

There are a few big publishing houses that print a tremendous percentage of our books. Fewer than there were a few years ago, due to consolidation.

But at least one of the six major houses has stopped purchasing new books from authors, either completely stopped or near-completely stopped. Times are tough for everyone but bankruptcy lawyers. (And their times are tougher when ours are better.)

I have a large bookshelf of IT tech books, mostly O'Reilly, but they are all gathering dust.

Whenever I need some technical information,I just google it, and it appears instantaneously. For items that are new to me I look for an online tutorial. Why ruffle through the contents and index of a book, often more than once, to find information.

... when it's convenient to do so (i.e., bad economy) just to trim the fat, whether they need to or not. Some companies just trim every couple years just to streamline. I'd like a company to have the balls to say "hey, we could weather the storm, but we owe it to our shareholders, NOT our employees, to make them money."

Didn't Google just a month or so ago report record profits in spite of the downturn and are yet cutting staff?

Are companies really slashing staff because things are looking bad or do many that are doing just as well as ever see this as an excuse to try and slash some dead weight without too many questions being asked? Or is it just because they think despite profits being up now things are going to get worse and they want to prepare?

There's no real need to go buy books anymore since everything is so dumbed down and stupifyingly simple. These days you can write your "programs" with nothing more than a mouse and a spiffy GUI. That doesn't really lend itself to sitting down and studying or using books as a reference.

Bollocks. A few years ago programming was just tapping away on a clicky keyboard with a spiffy green-screen terminal. Or, in other words, it hasn't changed at all; maybe you only write dumbed-down trivial apps, but the rest of us are still writing the good stuff.

"If you go online, you can pretty much download any of their books for free from their website. Maybe they can make it back through providing service..."

We could always go back to the good old days when someone with money (lets call them kings) would pay someone else (lets call them scribes) a sum of money to create a one of a kind product that would go perfect in one's personal library. I predict a growth market (lets call them paperbacks).

Most independent book stores are gone. B&N went though a bankruptcy and Borders is for sale. But books have good margins if you control inventory. I remember a decade ago, the large bookstores had huge sections devoted to tech books, but it has deteriorated (because of poor sales and rapid obsolescence) to a couple of book cases. In many ways it is just like the science and engineering section. Limited and focused demand of a small base for quality books and a shrinking base of noobs needing books. While O'Reilly is the gold standard, the market isn't there in depth anymore and the book market is being disrupted by online purchases (long tail, smaller runs, marketing issues), electronic delivery (cheaper but the cost savings are not passed on), and alternative sources of information (many technical solutions are a search away and seldom require the depth of a book).

Do you really use reference books any longer? I just use the web. I used to have my own line of 24 reference books, these days I'd feel bad about wasting all of that paper. Now, tutorial books can still sell.

That's an area most easily covered by the web and also an area that tends to go out of date quickly. I don't know they sell that much more highly than a good reference.

Do you really use reference books any longer?

All the time, but then I'm an O'Reilly Safari subscriber. Otherwise I probably would use the web resources instead. Either way, paper technical books are pretty much dead to me - but the content of the books if properly refreshed, I usually find more valuable than most web resources.

A couple of years ago I was part of a project that saw what was going to happen and tried to take publishing to a new level. Although initially interested, O'Reilly snubbed it, among other potential investors. That's his perfectly valid right (this is not a complaint or about that project). He's also the self-proclaimed god of web 2.0. Also, there is a huge, growing demand for education and knowledge in Asia (but they won't buy books for $80).

Bruce, I know *many* people who still prefer books. For me, I do much of my tech reading in bed and on the toilet. I still enjoy the *paper* in the morning (in bed and on the toilet). I buy a lot of books in e-book form, but I almost always end up printing the, out one-sided on 8.5 by 11, I keep 'em in big ring binders. Maybe I'm a dinosaur, psychologically, I *enjoy* books on paper, I feel they lend themselves to easier study, I can search and cross reference content MUCH faster than diddling around with some PDF or whatever on a laptop. Also, I like to have my references *open* beside me while I'm coding on my large but single monitor.

I can search and cross reference content MUCH faster than diddling around with some PDF or whatever on a laptop.

For me, KPDF's smooth scrolling incremental search is -hands down- the best search of any PDF reader.If the KDE team would a add HTML named anchor-esque bookmarking feature, and freeform persistent annotations and highlighting, then they'd have a *really* killer PDF reader.Heck, while I'm asking for ponies... it'd be *REALLY* super if it could make reasonably functional hyperlinks out of the TOC from a poorly-constructed ebook.

I definitely do. In the last year I've bought books on Kerberos and Asterisk and I'm glad I have them. My sole complaint with books is one of perception at the office. I can stare at a screen all day without being interrupted, but if I move to the "comfortable" corner of the office and sit in the relaxed chair under the nice reading light, everyone wants to stop and ask what I'm doing.

The point of rapid obsolescence is exactly why O'Reilly needs to restructure and remarket its Safari Books Online service. If this service was more affordable and well known to the average technology interested person, they could have a wide profit margin goldmine on their hands. They also need to make it more accessible, think Safari Books iPhone apps and more of that like.
O'Reilly needs to become the Netflix of tech books if they want to survive. They can't compete against lower quality but free, searcha

Good tech books do not become outdated/obsolete fast. Books tied to software, specifically certain versions of said software, become obsolete very fast. Of course bookstores usually stock books of the latter, and not the former.

Heh... I remember getting calls after I was hit in a post-dot-bomb layoff, asking "Have you seen what people are posting about the company at FC?"

Not knowing what FC was, I enjoyed reading the rants. But then again, I always thought they were stupid, in the end.

Stupid of the people (then looking for work) to post things like that in public, and stupid of the people still working there to even care what was being said.

Most of them were about the company's culture, which was based on the personalities of the owners, their professional backgrounds, and stuff like that...

Those guys sold the company a few years later for 3.5 million, and are on to working on their next company. The people who complained? Who knows -- but I bet they've haven't been as successful.

Why post to places like that? Get a life, get on to the next job, and move on. And I say that after being jobless for a year after that place. I was depressed, angry, all the classic stages of loss... and then I got on with life.

People will get on with life after this "global slowdown" too.

I say, the sooner the better. Kickstart it... move on, and don't wallow in it. Go do something useful today.

Heh... I remember getting calls after I was hit in a post-dot-bomb layoff, asking "Have you seen what people are posting about the company at FC?"

Not knowing what FC was, I enjoyed reading the rants. But then again, I always thought they were stupid, in the end.

Stupid of the people (then looking for work) to post things like that in public, and stupid of the people still working there to even care what was being said.

Only idiots are posting with their real names.:)

I did FC while my dot.com was circling the drain. It was certainly therapeutic. People who dwell on this years later are like people who still haven't gotten over high school but immediately following the traumatic event, it's good to vent and commiserate.

Of course, FC went downhill later after the stormfronters and race trolls took over, but that's another story.

China isn't remotely a communist country by the real meaning of the word. The only reason their economy has been booming in recent years is because they have opened up their markets (unlike a true communist country such as North Korea). Basically, you can have an authoritarian regime without communism (like china), although I've yet to see an instance of a communist regime that isn't authoritarian. At this point in time, I wouldn't be surprised if China's markets are actually freer than most of Europe's

You are mistaken.
Land in Australia can be held in 'freehold title' which is the highest form of estate in the land and represents full private ownership.
See Here [ga.gov.au] for the stats.
Much of the land in Australia is Crown leasehold, but it is certainly possible (and common - see Victoria) to own private freehold title.

of course... in any country owning land is only a technicality. I can't think of any country that doesn't have some form of eminent domain laws on the book. Technically they're supposed to compensate you with full market prices, but I know that doesn't always happen, and doesn't account for the personal significance often associated with a location. If a business is allowed to operate on a set piece of land that they paid for indefinitely, it's the same to them as owning it. While the government can sei

At this point in time, I wouldn't be surprised if China's markets are actually freer than most of Europe's markets.

1. If you look back at what was done in preparation for the Olympics, the Chinese government unilaterally shut down hundreds of factories and dirty power plants, many of which haven't been allowed to reopen.

2. Almost all of last year, the Chinese government had price ceilings in place for many food items, liquefied petroleum gas, and coal

I don't know if you can call that a free market.And even if it is, it certainly isn't freer than Europe's.The last time anyone put price ceilings on a commodities was the 7

I wouldn't be surprised if China's markets are actually freer than most of Europe's markets

buh? Based on what? And why Europe specifically? The OECD country that gets shit most at WTO meetings is the US, for constantly putting protectionist tariffs on imports. cf steel, cotton, sugar, ethanol, etc, etc

The hemmoraging will stop when people start forgetting that they've been told (by someone else, usually the media) that the economy is "bad" and go back to buying and selling things at higher levels than they are right now.

Go do what you're going to do: The economy will take care of itself, if you're working toward useful endeavors.

The problem was that we were being told absurd prices before, not that the prices are absurd now. My home supposedly tripled in value over the first 10 years since I bought it. Now, that would be a problem if you borrowed on that falsely-inflated value, or assumed that it represented a durable component of your net worth. I didn't. A lot of other people did, and they are paying for their mistake now.

Sure, this is really bad for people who bought within the last decade. But a Million-dollar mortgage has always been the equivalent of selling yourself into lifetime indenture. Maybe the slaves should have revolted before.

Amen to all of the above, Bruce. My house luckily just held steady. (I'm in the center of the country.) We're all kinda looking toward the shores (L.A., N.Y., Florida) and even a little toward the midwest and wondering, "What the HELL were you all THINKING?"

But then again, out here -- we're used to huge boom/bust cycles in business, and used to people moving here, then moving away, in droves... again and again. Those of us who actually want to live here, don't count the booms as gain, nor the busts as a

The hemmoraging will stop when people start forgetting that they've been told (by someone else, usually the media) that the economy is "bad" and go back to buying and selling things at higher levels than they are right now.

It's not just emotional: people really have less cash to burn. The housing bubble ended the happy days when homeowners could get huge loans, or when flipping houses was a major business activity (not that it produced any real value, of course.) Today you can borrow money only if you can prove that you do not need it.

Salaries also took a hit. Many are unemployed already; more will be; and often those who are still allowed to go to work every day are told that their salaries are reduced. What can they do? Business wise, sales of stuff (of all kinds) are dropping. People have less money to spend, so the industry has to reduce the manufacturing, so previously employed workers become unemployed. They don't need the media to tell them anything about the economy - if they have no job they already know themselves.

Add to that the news that many states are approaching bankruptcy and trying to increase taxes to cover the deficit. Or they can send state workers packing, that will save money but unions won't allow that. So everyone may need to pay higher [property] taxes using their reduced income. That leaves no money for toys and non-essentials.

Finally, people who had their money invested into the stock market lost big - as much as 40%. If they were investing into specific stocks, they can be wiped out completely. Look at how much value of banks' stock was destroyed - and banks were thought to be safe, long term investments. People holding bonds are not immune - now and then a bond issuer defaults, and then you have nothing. So one way or another, people have less money today, even though yesterday a lot of their money was of imaginary, speculative nature.

The cash they were burning was never theirs, for one thing. (Burning other people's cash is a great way to end up a wage-slave for the rest of your life. If you like the work they give you to do at the end, fine... but if it's not exactly your life's ambition of a job -- you're headed for revolution at some point. Not everyone can be an Astronaut when they grow up.)

Salaries took a hit? Most IT workers haven't had a raise that was more than inflation in a decade. Now mix that knowledge with, "Honey, let's take out a big loan against the place we need to LIVE IN!" Pretty stupid, eh? Not here!

States and Unions and all of that... yeah, lovely stuff our voted politicians did with their surpluses, eh? How few people were voting for fiscally conservative politicians during the good years in the normal 7-10 year business cycle? Do those who voted for non-conservatives take any blame for their local government being out of cash? Are they willing to pay up NOW to cover who they voted for?

Unions: They'll eventually be busted, one way or another. It's not like sending billions to Detroit is going to suddenly teach GM how to make a car that lasts as long as a Honda. Guess what people are going to buy when times are tight? You buying a GM product, or a Honda/Toyota/Acura? I know which one I want if my car budget is tight.

Stock Market: If those people were truly INVESTING (by definition investing is using money you DO NOT NEED TO LIVE ON FOR SOME TIME YET), they aren't in trouble. They knew if they needed to live on it in the next five years, they were already out of stocks and into less risky assets. The real issue with the stock market right now is there are people dorking around in it pretending they know what they're doing, and who are being ripped off by mutual fund managers and the whole market is being gamed by hedge funds, etc. The reality is, the market's rigged to make big money, big money. The little guy has to be very intensely engaged to follow big money's moves and continually make money. The fallacy of the mutual fund is that it removes the RISK. It doesn't. It means we all go up and down together. The market is packed to the gills with Baby Boomer 401(K) money that should have already started to have been diversified out of the stock market. Oh well, it's out now... poof. Bye-bye. 40% losses on a true INVESTMENT sucks, but it's not supposed to change your LIFESTYLE, if you did it right.

So yeah... people were imagining they were creating wealth, and it bit them in the ass. Now the key to recovery is to GET TO WORK and really create some wealth. Do we have any companies that can make things of a quality level seen back in the 1950-1969 era? Can we do it?

I think we can.

Oh, and in most cases... sorry Slashdotters... SOFTWARE is not the answer. INTEGRATION and really thinking HARD about the big picture of what a company is accomplishing long-term with their products... is the answer.

The hemmoraging will stop when people start forgetting that they've been told (by someone else, usually the media) that the economy is "bad" and go back to buying

"people" dont have money, sure they can get cheap credits, but credits are to blame for the crisis in the first place. America is not producing goods any longer, you all live off forein credits (mostly China).
This living on debt cant go forever you know, you will go under, hiperinflation and all.

We have to buck up, think hard, and build things worth buying again. It can be done...

To use a popular political catch phrase... Hope and Change.

The problem I have with that is: I don't want my Hope and Change to come from the GOVERNMENT.

I want it to come from ME and the people I work with for our own gain, which we'll happily share with our vendors/suppliers, the community, and if the world likes it... the world, via our goods and/or services.

People's spending before was based on credit and rising property prices. Now property is down, and the credit has dried up, people cannot spend at the levels they were spending before. The economy was over-inflated, it's merely returning to its natural level.

Plus you can't expect people to spend money when they don't know if they'll have a job next week.

The hemmoraging will stop when people start forgetting that they've been told (by someone else, usually the media) that the economy is "bad" and go back to buying and selling things at higher levels than they are right now.

Only if they forget that they don't have any damned money. Wages have been stagnant for decades, and the economy is propped up on credit. The problem isn't a mindset, it's that the middle class is broke.

In short, the deregulation of credit derivatives and lowered lending standards created a real estate bubble. The depression will ease once homes return to their pre-bubble prices, which is still a ways off.

The only way to soften the impact of the trillions of dollars of equity disappearing in a few short months is to create jobs through government spending. If you give the money to anyone else, they will just hoard it in today's economic climate, so you have to keep the low and middle class working and spending, and at least direct money towards infrastructure improvements. We could easily afford it by halting foreign wars and slashing military spending, but that seems unlikely at this point.

As far as China is concerned, they will emerge from this crisis as a new economic superpower within five or ten years. They have huge growth potential internally, and they are essentially the manufacturing engine for the world. America will continue to slip behind unless we reinvest in education and the manufacture of high tech products, and drop our costly engagements in South America and the Middle East.

Sometimes I think their model of communism is better than our capitalism. Why? Because they potentially can now control our government's priorities.

In other words, it's better, because it appears to be working at the moment? Social Darwinism on a grand scale?

See, I don't think that makes them "better". Possibly more effective, though we still don't know.

I would argue that the problem with our capitalism is mostly the fact that we've let a free market devolve into, in many cases, corporate oligopolies. Effectively, it means our country is no longer a democracy, we're an oligarchy.

Their communism, on the other hand, always was an oligarchy, despite the f

Sometimes I think their model of communism is better than our capitalism. Why? Because they potentially can now control our government's priorities.
We go down, we take them with us. That is really the only reason that China didn't call the mortgage years ago.